According to a new study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
